NEWS + ANALYSIS

Last March, before the Russian annexation of Crimea, a group of European economists and reformers, of which I am a member, tried its best to prevent the most damaging political, economic, and financial scenarios from befalling Ukraine. Now the economic and financial situations are much worse because of the annexation and support for separatists in eastern Ukraine. GDP is expected to contract by 9 percent by year’s end, central-bank reserves by more than 50 percent. Depreciation of the local currency this year is running at 50 percent, and inflation is around 20 percent. Two thirds of the banks are illiquid, and government debt is mounting.